Based on the latest Apple quarterly earnings report, it seems that Apple’s newer iPhone models have been a hit, along with the fast-selling Apple Watch and AirPods Pro (pictured above) devices. Critically, the quarter included holiday sales of of the new iPhones introduced in 2019 (iPhone 11, iPhone 11 Pro, and iPhone 11 Pro Max).
CEO Tim Cook and his associates told investors on today’s earnings call that revenue is up 9 percent to a total of $91.8 billion. The iPhone grew 8 percent to make up $55.96 billion of that.
The product category that includes the Watch, AirPods, and Beats earned $10 billion this quarter. Cook bragged that those three products would together match a “Fortune 150 company.” The category earned $7.3 billion in the same quarter last year. Also, CEO Tim Cook said on the investor call that more than 75 percent of people who bought Apple Watch devices during the quarter were new to the product.
Apple also saw a 17 percent year-over-year increase in revenue for its services business, which includes Apple Music, Apple TV+, iCloud, AppleCare, Apple Pay, Apple Card, and more.
Some other tidbits worth noting: Apple claimed that demand for the Apple Watch and AirPods was so high, the company struggled at times to produce enough units to meet it. The company reported new, more positive growth numbers in China after that region had been a struggle for the company in some recent quarters. And Cook told investors on the call that 1.5 billion Apple devices are in use globally, an increase from 1.4 billion the last time he shared the figure.
Apple’s performance beat analyst estimates across the board. Investors see this quarter as something of a comeback, as just a year ago Apple failed to set a new earnings record for the first time since the iPhone was first introduced. To that point, The Wall Street Journal called this and the company’s rising stock prices over the past year after that alarming quarter “one of the biggest one-year rallies in history.” Apple’s stock value grew 3 percent after the earnings call concluded.
However, there may be some risk for Apple investors in the immediate future: the company gave an unusually large guidance range for the next quarter, citing uncertainty about the impact of the coronavirus epidemic in China on both the supply line and the Chinese consumer market.
Cook disclosed that the virus has already substantially impacted Apple’s operations in China, resulting in travel restrictions, reductions of retail store hours, and one temporary store closure. Additionally, Apple works with suppliers in the heavily affected Wuhan area, and has seen shutdowns of some manufacturing facilities in China as the Chinese government seeks to contain the virus. Cook also said that Apple has distributed “care kits” to its employees in China.
When the call opened to questions from investors, some inquired about Apple’s 5G plans, citing analyst projections about how the new technology could drive new smartphone sales while also expressing concern that said tech could increase the price point of the iPhone.
Cook largely dodged these questions. Instead, he repeated the mantra that Apple does not comment publicly on future products while noting that the 5G rollout is still in an early stage globally. But it was clear that some investors were anxious that Apple is not moving as aggressively as some competitors to capitalize on 5G. Apple is likely to introduce a 5G iPhone either this September or next, however.